Current liabilities could include all of the following except:
A) an accounts payable due in 30 days.
B) a notes payable due in 9 months.
C) a bank loan due in 18 months.
D) any part of long-term debt due during the current period.
Which of the following would not be reported as an asset on the balance sheet?
A. Accounts Receivable
B. Supplies
C. Retained Earnings
D. Cash
When inventory is sold, the cost of the inventory is removed from inventory and
reported on a multistep the income statement as:
A) inventory expense.
B) cost of goods sold.
C) selling, general, and administrative expenses.
D) operating expenses.
A company reported net income of $5.6 million. At the beginning of the year, 3.4
million shares of common stock were outstanding and at the end of the year, 3.6 million
shares were outstanding. No dividends were declared. The EPS is approximately:
A) $1.60.
B) $1.56.
C) $1.65.
D) $1.40.
Censing Company collected $5,000 from a customer on account. What journal entry
will be prepared by Censing to record this transaction?
A) Debit Cash and credit Accounts Receivable.
B) Debit Cash and credit Service Revenue.
C) Debit Accounts Receivable and credit Service Revenue.
D) Debit Accounts Receivable and credit Cash.
Which of the following is not an accounting transaction?
A) Issued shares of stock to investors in exchange for cash contributions of $4,000.
B) Ordered inventory from suppliers for $3,000.
C) Sold equipment to another company for $3,000 and accepted a note from the
company promising payment in 6 months.
D) Borrowed money from the bank by signing a promissory note for $2,000.
Under the direct write-off method, the entry to write off a customer’s account would
include a debit to:
A) Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
B) Bad Debt Expense and a credit to Accounts Receivable.
C) Write-off Expense and a credit to Accounts Receivable.
D) Sales and a credit to Accounts Receivable.
Which of the following is correct about reissuing treasury stock?
A) If treasury stock is sold at a higher price than the stock’s cost when the company
reacquired it, a gain will be recognized.
B) If treasury stock is sold at a higher price than the stock’s par value, a gain will be
recognized.
C) If the treasury stock is sold at a lower price than the amount of the original issuance,
a loss will be recognized.
D) A gain or loss on the reissuance of treasury stock is never recognized.
Which of the following is performed last at the end of the year?
A) Prepare adjusting entries.
B) Prepare an adjusted trial balance.
C) Prepare closing journal entries.
D) Prepare a post-closing trial balance.
During 2016, Ambiance Company reported net revenue of $3,600,000. The company
reported net fixed assets of $710,000 on January 1, 2016 and net fixed assets of
$890,000 on December 31, 2016.
Required:
Part a. Calculate the fixed asset turnover ratio.
Part b. Assume the 2016 fixed asset turnover ratio was lower than the 2015 ratio.
Explain how an analyst might interpret this change.
Part c. Describe at least one circumstance that might have caused the fixed asset
turnover ratio to decline and be consistent with bad news.
Part d. Describe at least one circumstance that might have caused the fixed asset
turnover ratio to decline and yet be consistent with good news.
A current ratio of 2.5 means that for every dollar of:
A) accounts payable, there is $2.50 of cash.
B) current liabilities, there is $2.50 of current assets.
C) current assets, there is $2.50 of current liabilities.
D) total liabilities, there is $2.50 of cash.
During the month, a company enters into the following transactions:
-Buys $4,000 of supplies on account.
-Pays $5,000 cash for new equipment.
-Pays off $3,000 of accounts payable.
-Pays off $1,500 of notes payable.
Required:
Part a. Show the effect of these transactions on the basic accounting equation.
Part b. Prepare the journal entries that would be used to record the transactions.
On the balance sheet, the Allowance for Doubtful Accounts:
A) is included in current liabilities.
B) increases the reported Accounts Receivable, Net.
C) is reported under the heading “Other Assets.”
D) is subtracted from Accounts Receivable.
Use the information above to answer the following question. What was the amount of
cash flows from (used in) operating activities?
A) $5,000.
B) $35,000.
C) $25,000.
D) $4,000.
Which of the following statements about revenues and expenses is correct?
A) Both revenues and expenses typically have credit balances.
B) Revenues and expenses are considered assets and liabilities, respectively.
C) Revenue is the same as cash.
D) Expenses decrease the amount of stockholders’ equity.
Seconds Best Retail Store receives and immediately pays a $3,500 utility bill from the
City Gas & Electric Company. City Gas & Electric Company will record the receipt of
this payment with a journal entry that includes a:
A) credit to Accounts Payable
B) credit to Utilities Expense.
C) debit to Utilities Revenue.
D) debit to Cash.
Multiple-step income statements:
A) separate core results from peripheral results.
B) includes one subtotal for revenues and one for expenses.
C) exclude certain significant items from net income.
D) only report core results.
The ratio that measures how many times a company replenishes its inventory in a year
is the:
A) days to sell ratio.
B) receivables turnover ratio.
C) inventory turnover ratio.
D) days to collect ratio.